Compute basic and diluted earnings per share

Reference no: EM13764987

Karen Company had 105,000 shares of common stock outstanding on January 1, 2011. On August 30, 2011, Karen sold 50,000 shares of common stock for cash. Karen also had 11,000 shares of convertible preferred stock outstanding throughout 2011. The preferred stock is $105 par, 5%, and is convertible into 4 shares of common for each share of preferred. Karen also had 400, 8%, convertible bonds outstanding throughout 2011. Each $1,000 bond is convertible into 35 shares of common stock. The bonds sold originally at par. Reported net income for 2011was $350,000 with a 35% tax rate. The regular common and preferred dividends were paid in 2011.

Requirements:

1. Compute basic and diluted earnings per share for 2011

2. What is meant by dilution of earnings per share?

3. What is the "if converted method"?

Reference no: EM13764987

Questions Cloud

Measure for an asset held in a diversified portfolio : Which is the best measure of risk for a single asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?

Need to raise capital : As a financial manager, you need to raise capital for your company. Your bank will not give you the terms needed to initiate a project. You need to raise $10,000,000.00 and don't want to pay more than 6% annual interest (paid bi-annually) so you deci..

Problems related to anthropology : Distinguish between members of genus Australopithecus and Paranthropus in terms of time, location, and physical features.

What options does the judge have in this incident : Based on the facts of the case and the procedures of the juvenile justice system, what would be the most appropriate finding for the court? What options does the judge have in this incident

Compute basic and diluted earnings per share : Compute basic and diluted earnings per share for 2011 What is meant by dilution of earnings per share?

Create synthetic callable debt from non-callable debt : You have graduated, and are on the staff of the Assistant Treasurer of company CKS. (You are an assistant to the Assistant Treasurer.) Your boss, the Assistant Treasurer, recently attended a conference at which he heard that swaptions could be used t..

History of accounting regulations : Find an article in a professional/peer reviewed journal using the library (do not use just a Google search) that discusses the history of accounting regulations.

Defined as the average compounded return earned : Which one of the following is defined as the average compounded return earned per year over a multiyear period?

Cesare beccaria argued that threat of punishment control : Now that you are familiar with the various elements of the criminological enterprise, apply what you have learned to your own personal behavior in your written assignment. Cesare Beccaria argued that the threat of punishment controls crime

User Account

All Pages